NEW DELHI: The government plans to invite bids from private and public companies for interstate power transmission projects through reverse electronic auction on build-operate-own (BOO) basis for 35 years.

The power ministry and state-run auctioneer MSTC will soon launch a bidding platform to shift from the present manual auction process to determine the lowest bidder. The transparent reverse auction process will enable bidders to revise their bids during the live bidding process, a government official said.

The auction process will begin with bid process coordinators – the transmission wings of state-run Rural Electrification Corporation (REC) and Power Finance Corporation (PFC) – to float tenders. The coordinating agencies will call for technical bids and initial price offers, and later prune half of the technically qualified bidders, subject to a minimum of four, for the final reverse eauction.

Companies that claim lowest levelised tariffs for electricity transmission will bag the projects.

REC Transmission Projects has identified two big transmission projects – transmission system connecting phase-I power generation projects in Arunachal Pradesh and NER system Strengthening Scheme-II and V — for immediate auction on the proposed bidding platform.

While a committee is likely to soon determine the estimated project cost of the two transmission projects, industry experts said the projects are expected to cost about.`700 crore each.

The power ministry has approached the Union cabinet for separation of central transmission utility function related to transmission planning and grant of open access in the interstate transmission system from state-run Power Grid Corporation.

The proposal for separation of planning function from Power Grid was mooted amid rising concerns on conflict of interest and level playing field for private companies as the state-run company is involved in planning the transmission system and participates in the bidding as well.

After the separation, an independent non-profit organisation will carry out the transmission planning and also organise bidding process for projects under tariffbased bidding.